5 Reasons You Should Hire A Tax Professional This Year
February 14, 2018 |
Using a tax professional to help make sure you get the largest possible refund this year is just one reason it pays to turn over this important job to the experts.
At tax time, most small business owners focus on minimizing their tax bill or getting the biggest refund possible. Either way, a tax professional understands the finer points of tax law in a way that automated software popular with the DIY tax crowd can’t.
1. Avoiding mistakes can mean avoiding an audit
If you are self-employed, working part-time while attending school or just freelancing on the side, you could do your own taxes and avoid the expense of hiring a professional. The potential for income discrepancy between W-2 and 1099 forms and the amount you claim is real. Even an honest mistake can trigger an IRS audit. Most tax pros guarantee their work and back it up with help if you end up on the audit list.
2. Sweeping tax reform leaves many taxpayers confused
For the first time in 30 years, self-employed citizens may be better off claiming the new, higher standard deduction than they would be itemizing their taxes. The elimination of personal exemptions plus the higher standard deduction will hurt some, but in certain income categories, making a change to how you file could mean a break on your tax bill. A tax professional can run the numbers both ways.
3. Unreimbursed employee expense deductions disappeared
For some individuals, the employee expense deductions offered another way reduce taxes. Under the current tax reform, this deduction is no longer available. Any business expenses incurred by an employee and not reimbursed by the employer won’t count as a deduction. Anyone who used to claim unreimbursed expenses should consult a tax professional to find out how much this change will cost them and what they can do to offset it. This is just one of the many changes that will affect the self-employed. If you are a business owner, the changes to what you can deduct are even more complicated.
4. What is your time worth?
A tax professional can get your taxes prepared and filed in a fraction of the time it will take you to go through the process.
Nearly 70 percent of Americans use Form 1040 and according to the IRS, it takes them an average of 16 hours to complete the entire process of gathering paperwork, filling out the return, and submitting it. That’s a fraction of the time it takes a small business owner to complete the task.
According to SCORE, most small business owners spend more than 41 hours each year on tax preparation tasks. Could your time be better spent elsewhere?
5. Three years of forgiveness if you’ve made a mistake
Did you know that you can file an amended tax return if you’ve made a mistake or there was an oversight on one of your previous returns? Taking past tax returns in to have a professional look them over is a smart move that could minimize damage and even further reduce your past tax bills.
Filing an amended return is easy, and if the tax professional discovers deductions you’ve overlooked, it could mean a big windfall. Small business owners should consider having a professional take a look at both their personal and business tax returns. Investing found money in a small business is a smart move.
Having a tax expert prepare your taxes will cost you money. Like many decisions, it’s important to consider the future ramifications of the DIY route. Especially when we are facing the biggest tax reform in 30 years, now may be the best time to create a relationship with a tax professional.